Pension. Please guide.

[adubya]

Just make sure you compare them carefully, including all platform fees. Nothing wrong with AJ Bell or similar per se, but you need to consider the overall fee structure. There is no cheaper way to invest in Vanguard funds than via their platform, I think, and they have a good range of funds. Unless you’re a sophisticated investor (the OP sounds like they want a simple solution), they are very tough to beat, which is why they compare extremely favourably with other platforms in industry reviews. Remember, a large chunk of profit disappears in total fees over time.

Vanguard are good but for larger holdings (£120K+) their %age based fee structure will cost more than a flat-fee provider. That's what's keeping me from using Vanguard currently.

[jamesbrown]

Vanguard are good but for larger holdings (£120K+) their %age based fee structure will cost more than a flat-fee provider. That's what's keeping me from using Vanguard currently.

Last time I checked, it was capped at £375 pa., regardless of amount.

[sammy2020]

Thanks for all replies. It’s really helpful. I was checking SIPP with fidelity. It showed that if I pay £40000, HMRC pays in £10000 (25%). It seems bit unrealistic to me that you get 25% just like that and on top of that you save tax (say 20%). So it is straight 45% return. Or may be I am wrong somewhere.

And secondly, is £40000 constrained by salary I get from my limited company? And this £40000 I pay to pension provider is paid by company for me or me as employee (for SIPP). At this moment I am not looking for which fund is better, but at rules and regulations so that my pension investment is not considered ineligible for tax savings.

Fidelity sent me this email for workplace investing pension

“Thank you for contacting the WI Service Centre. As discussed with myself, this scheme allows direct lump sum payments, known as Single Premiums.



For us to accept a Single Premium payment from a company, we require the following:



• A covering letter signed and dated by the member that includes three identifiers such as their full name, National Insurance number, date of birth, address, scheme name or seven-character Fidelity reference number

• The covering letter should also include the name of the company from which the payment is to be made

• A copy of the company's house registration or Certificate of Incorporation

• In addition, we need an original written statement from the company on headed paper confirming they’re gifting the money to the member and accept they’ll have no further claim on the money. This needs to be signed by the company’s authorised signatories”

[sludgesurfer]

Best comparison table I've found:

Best trading platforms and stock brokers

Most investors could do a lot worse than: Vanguard LifeStrategy funds turn passive investing catatonic

The average active manager underperforms the broader market after fees.
A wealth manager will normally add at least 1% on top of the fees of the underlying holdings. This is a significant drag on performance over time and one which in all likelihood will drop the overall performance below that achieved by a world index tracker.

The average profit margin for the investment management industry varies from 5 to 40% with an average of 14.7%. Their profit is your money.

What is the average profit margin range for a financial services company?

To pay for active management, you need to be damn sure you are getting "alpha". In my experience, it's very easy to think you are when you're actually not.

[jamesbrown]

Thanks for all replies. It’s really helpful. I was checking SIPP with fidelity. It showed that if I pay £40000, HMRC pays in £10000 (25%). It seems bit unrealistic to me that you get 25% just like that and on top of that you save tax (say 20%). So it is straight 45% return. Or may be I am wrong somewhere.

I think you’re confusing personal and company contributions. You will save CT with a company contribution if it meets the wholly and exclusively test (it will). Conversely, if you make a personal contribution from your after tax income, then you will get a notional refund from HMRC. You don’t get both.

[Lance]

9.5% decade to decade growth?
That’s bloody awful.
You sure you know where to invest?

[adubya]

Last time I checked, it was capped at £375 pa., regardless of amount.

Yes, but other providers have a flat fee half of that.

[jamesbrown]

Yes, but other providers have a flat fee half of that.

In any case, you need to look at fees in the round. I agree that you need to do this for the expected amount invested. But there is a reason that Vanguard routinely comes out top in industry comparisons of total fees. For example, outside of ETFs, there are no dealing charges whatsoever. TBF, they have driven the market down so that other platforms are eliminating a lot of their hidden fees too.

[adubya]

In any case, you need to look at fees in the round. I agree that you need to do this for the expected amount invested. But there is a reason that Vanguard routinely comes out top in industry comparisons of total fees. For example, outside of ETFs, there are no dealing charges whatsoever. TBF, they have driven the market down so that other platforms are eliminating a lot of their hidden fees too.

Oh yes. All of my SIPP holdings are Vanguard funds, it just happens to be cheaper to hold them outside of the Vanguard SIPP for me.

[jamesbrown]

Oh yes. All of my SIPP holdings are Vanguard funds, it just happens to be cheaper to hold them outside of the Vanguard SIPP for me.

What platform are you using?